Latest MeasureOne Private Student Loan Report Finds Pandemic-Related Forbearance
Levels Have Stabilized While Delinquencies and Defaults Remain At Historic Lows
Private Lenders Continue to Offer Assistance to Students and Families During Unprecedented Time
SAN FRANCISCO, Dec. 9, 2020 /PRNewswire/ -- MeasureOne today released its Private Student Loan Report, an industry leading research report leveraging MeasureOne's custom analytics services. This 15th edition of the report again affirms that students and families continue to responsibly use private student loans to cover college costs. The vast majority of private student loan borrowers – 98% of families – continue to successfully manage payments and less than 2% default, annually. In addition, private lenders continue to offer options for students and families experiencing hardship due to the COVID-19 pandemic, including the postponement of payments. These ongoing relief efforts resulted in forbearance levels at 7.0% in Q2 but that has since stabilized and is currently at 3.7%.
"While the ongoing pandemic has created financial challenges for students and families, private lenders continue to offer options for those families experiencing hardship," said Elan Amir, CEO for MeasureOne. "It is encouraging that delinquency and defaults remain at historic lows and forbearance levels are stabilizing, reaffirming how strong underwriting and focus on ability to repay leads to customer success."
Private student loans, which are fully underwritten to assess creditworthiness and ability to repay, make up approximately 8.1% of total student loans outstanding as of Q3 2020. The remaining 91.9% of the $1.70 trillion in student loans are federal loans owned or guaranteed by the Department of Education.
The Private Student Loan Report ("Report") reflects data as of end-Q3 2020 for private student loans and does not include federal student loan data. The performance attributes for this quarter show a promising recovery from the initial impact of the pandemic. Consistent with prior quarters, the Report finds that delinquencies and defaults remain at or near historic lows. As of the end of Q3 2020, the report found:
- Private student loan originations in Academic Year to Date [AYTD] 2019/20 was $10.14 billion, up 4.98% year-over-year, and AYTD 2020/21 (Q3 2020 only) was at $3.52 billion, a 12.4% drop year-over-year.
- Loans in distress (forbearance plus 30+ days past due delinquent as a percentage of repayment plus forbearance) dropped to 7.52%, compared to 9.98% at end-Q1 2020 and well below levels seen in the Great Recession (which peaked at 18.55% in Q1 2009).
- Forbearance utilization dropped 48% at end Q3 2020 from the previous quarter's peak of 7.04% as borrowers were able to exit the industry customer relief programs. The current forbearance utilization remains elevated over the normal range of 2% to 3%(and higher over last year's end-Q3 level of 2.22%).
- Early-stage delinquency (30 to 89 days past due) rate was 2.14% of loan balances in repayment (excluding forbearances as usual), and similarly the late-stage delinquency (90+ days past due) rate was 0.66%. Both are near historic lows.
- Annualized defaults were 1.26% of loan balances in repayment and are near historic lows.
- The total outstanding balance for private student loans represented in the Report was $64.87 billion (including in-school loans but excluding consolidation, refinance and parent loans).
- Undergraduate loans accounted for 88.50% and graduate loans 11.50% of loans originated in AYTD 2019/20.
The bi-annual Report includes continuous contributions from the six largest student loan lenders and holders: Citizens Bank, N.A., Discover Bank, Navient, PNC Bank, N.A., Sallie Mae Bank and Wells Fargo Bank, N.A. In addition to these MeasureOne Private Student Loan Consortium members, this report includes data from 9 other student lender contributors. In total, these contributors represent the vast majority of in-school originations and a majority of the private student loans outstanding in the U.S.
The full Private Student Loan Report is available for download at https://www.measureone.com/resources
About MeasureOne
In September 2019, MeasureOne introduced a new developer platform to drive innovation and new customer applications based on academic data. MeasureOne is now the leading API platform provider for academic data and predictive analytics. Using MeasureOne products, application developers across industries, including academic institutions, employment, lenders, marketing, residential real estate and insurance can leverage academic achievements to deliver compelling insights, products and services to emerging consumers. MeasureOne is headquartered in San Francisco. For more information about MeasureOne, visit www.measureone.com.
SOURCE MeasureOne
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